The damage was done premarket and value buyers were quick to take advantage. The index which benefited the most was the Nasdaq. It started today just above the 50-day MA and rallied off that. Volume wasn't great and the technical picture didn't really improve, but action like today's can prove to be a good starting point for a swing low.
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Despite the gain in the Nasdaq, Breadth metrics are weakening but are neither overbought nor oversold. The next strong swing low will likely take a tag of the light green line.
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The S&P actually held to a small loss, but it made a firm defense of its 50-day MA. The intraday spread was not as great as for the Nasdaq, but the 50-day MA test is a working point for a swing low.
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The Russell 2000 also staged a recovery, but not enough to make it above resistance. Today's closing hammer is an opportunity to mount a rally tomorrow, with a stop on a loss of today's lows.
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Today's actions fit with a swing low, but confirmation is needed with a series of higher closes over the next few days. Shorts were left hanging in a day were prudence proved to be the better course of action.
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